Bloomberg News

Japan Futures Little Changed as Yen Gain After Fed Rate Pledge

January 26, 2012

Jan. 27 (Bloomberg) -- Japanese stock futures were little changed as the yen rose against the dollar after the Federal Reserve pledged to keep interest rates at a record low and U.S. homes sales unexpectedly fell. Australian equities rose as commodity prices jumped.

American depositary receipts of carmaker Honda Motor Co., which gets more than 40 percent of its sales in North America, lost 0.7 percent. Nintendo Co. may be active in trading after the world’s largest maker of video-game machines more than tripled its full-year loss forecast. ADRs of Mitsubishi Corp., Japan’s largest commodities trader by market value, rose 0.2 percent. BHP Billiton Ltd., Australia’s biggest oil producer and No. 1 global mining company, climbed 1.3 percent in Sydney.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 8,860 in Chicago yesterday, compared with 8,850 in Osaka, Japan. They were bid in the pre-market at 8,860 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index rose 0.3 percent today, while New Zealand’s NZX 50 Index gained 0.4 percent in Wellington. Stock markets in China and Taiwan are shut for the Lunar New Year holiday.

“Investors may be getting too optimistic about the U.S. economy,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. The Fed’s pledge “is a tailwind for energy-related stocks.”

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The gauge lost 0.6 percent in New York yesterday as banks tumbled and a report showed that sales of new homes declined in December for the first time in four months. Claims for U.S. jobless benefits rose last week.

Dollar Falls

The dollar weakened versus all of its 16 most-traded counterparts as the Federal Reserve’s pledge to keep interest rates at a record low for longer than originally forecast spurred investors to seek higher yields. The U.S. currency depreciated to as low as 77.29 yen today in Tokyo, compared with 77.63 yen at the close of stock trading yesterday, cutting the value of income at some Japanese exporters when repatriated.

Copper rose to a four-month high in New York yesterday after the Federal Reserve extended a pledge on Jan. 25 to hold interest rates near zero, potentially spurring metals demand. The London Metal Exchange Index of prices for six industrial commodities including copper and aluminum gained 2.4 percent, the biggest gain since Jan. 10.

Crude oil for March delivery added 0.3 percent to $99.70 a barrel yesterday in New York, the highest settlement price since Jan. 19.

The MSCI Asia Pacific Index gained 7.7 percent this year through yesterday, compared with increases of 4.8 percent by the S&P 500 and 5.4 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.3 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index in Europe.

The Bloomberg China-US 55 Index of the most-traded Chinese stocks in the U.S. slid 0.2 percent to 102.55 yesterday in New York.

--Editors: John McCluskey, Jim Powell

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net


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